After the bell today one of my top holdings, $KLIC, is ripping up over 16% because the firm came out early and guided way up on increased demand and visibility in the semiconductor industry. The reason why I bought $KLIC a few days ago was because the chart looked ready to make another move higher after consolidating from the most recent run up. Below you will find an updated chart that does NOT include today’s after hours action.
You might think that I am posting this news flash to pound my chest, alpha-male style. Well, possibly. However, a more IMPORTANT reason for posting this is to illustrate how unpredictable earnings season can be. This company was not even scheduled to issue earnings until May 6!!! Yet, here they are after the bell causing a massive re-pricing in the stock. So, despite the fact that I won, and won big this time, do you see why I have been so persistent in telling you to have some extra cash on hand? I could easily see some downside surprises with other stocks that I own. Having extra cash on hand would help to cushion the blow if that happened. Earnings season, in particular, is a time for respecting risk and not recklessly disregarding it. You are dealing with both expectations and cold, hard numbers. Trading in anticipation of how those two will collide, instead of trading based on price and volume during the other times of the year, offers you a generally unfavorable risk/reward profile as an individual trader with no inside information. Of course you can still hold positions, just be a little more careful than usual, and a little more street smart…
As for the broad market, you might as well see my previous market wrap ups from the past few days. It appears that we remain in the vacuum up to 1220, drifting and “slap-chopping” the bears higher. I think you should be mostly long right now, and I favor being in cash in lieu of being short as the danger of a blow off top is too menacing. At some point, we will need to come back down and test the 20 and/or 50 day moving average, in addition to possibly needing a retest of the 1150 breakout zone.
TOP PICKS: $DPZ, $KLIC, $CLNE, $CSIQ
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nice wrap, pro!
Good charting by you too, sir.
Another timely and thoughthful post.
I especially learn from your read of the general market and strategy advice on how to play it wisely.
Much appreciated, glud! Thanks for reading and the feedback as well.